No Left Turns

The formerly middle class

David Brooks suggests that the moral effects of a recession are generally not good and that we might expect an angry political response from the formerly middle class folks who are losing their homes, not to mention from people in other parts of the world who will suffer substantial setbacks as a result of our current economic upheaval.

He may be onto something, but he seems to have forgotten that the Depression also was the time when our "Greatest Generation" came of age. He is of course correct that we’ve suffered a decline in social capital since then (some of it the product of our easy prosperity, not to mention a culture that elevates "choice" above almost every other consideration). And the admirable sacrifices that characterized that generation were called forth by an existential threat, not by the New Deal.

President-elect Obama likes to conjure visions of Lincoln, but Lincoln’s America also faced an existential threat. And Lincoln is much more subtle and thoughtful than Obama has yet proven himself to be.

On the other hand, Richard Cohen wants Obama to emulate FDR, though he confesses that he has no idea what the basis of his optimism should be. Perhaps there’s a clue in the other book Obama says he’s bringing with him to the White House. (I’ll note also that, whatever he actually believed, FDR was very willing to use religious language in public.)

Discussions - 3 Comments

Pete

Brooks is so right in today's article. Alot of people are going to lose not only middle class income but also their own self image as being middle class and this will have huge political ramifications. I would divide people who are losing (or fearful of losing) middle class status into three groups.

1. People who were clearly middle class (household income over 75,000)who have now lost their jobs and whose houses face foreclosure and now owe more than the value of their homes. They probably have skills but will be looking for jobs at a lower payscale. They have 401(k)s to cushion the pain but the 401(k) is alot smaller than it used to be and was supposed to be for retirement anyway. They are looking at sharply reduced living standards and feel like they will be lucky to maintain a toehold in the lower middle class.

2. These are people whose household income was between 30 - 50,000 a year. They had a house but could barely afford to make the payments when the economy was growing and housing prices were rising. They worked hard but their living standards were stangnant except those financed by credit. They were holding on hoping things would get better and praying nothing major went wrong. Their hold on middle class life was precarious in the good times and has now been blasted - maybe forever for all they can tell. This is the group that Brooks writes about today

3. This is people who see the exodus out of the middle class and wonder if they are next. The last 25 years have produced an expectation of upward mobility if you (in Bill Clinton's memorable phrase) "work hard and lay by the rules". The last eight years have been a disappointment in that the living standards of many have stangnated, but at least unemployment was low and homeownership and credit were widely available. A widely shared expectation of declining living standards and imminent downward mobility would be a transformation in our politics. This third group might be the most important as the financially anxious are likely to outnumber the finaincially ruined - who will be many.

Brooks believes that the result will be public anger and economic radicalism. Maybe. But it also offers the oppurtunity for the revival of economic conservatism. If conservatives can offer a set of policies that wil plausibly improve the employment prospects, takehome pay, and economic security of the hurting and anxious, they will find a ready audience. If conservatives don't, then someone else will, with probably disastrous results.

One way to NOT appeal to these people: To tell them that you will not raise their taxes when they are making 250,000 a year.

I was not alive during the Great Depression, but my parents were and I see the results of living without. Seventy years later they still go to the grocery store every week, despite a full freezer. Save every plastic sac, container or jar, because "I might need it".
Watching them, do with and without through the years, I have come to think that the generation of that time took great pains to save, scrape and get by on the most they had.
I think today, we are going to learn that lost art. Living within our means, and not on our credit cards.
Remember all the warnings that past years of the house of credit cards we were building? It has not come down and we are going to have to do what generations before us have done.
Smaller houses, smaller, older cars, McDonald's coffee and not Starbucks, less eating out and more maximizing the grocery list.
Living within our means, what a concept!

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